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The Bell Co. is a new firm in a rapidly growing industry. The company is planning...

The Bell Co. is a new firm in a rapidly growing industry. The company is planning on increasing its annual dividend by 20.00% a year for the next 4 years and then decreasing the growth rate to 4.00% per year. The company just paid its annual dividend in the amount of $2.70 per share. What is the current value of one share of this stock if the required rate of return is 8.20%?

A.

$101.15
B.

$117.93
C.

$138.63
D.

$115.23
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Answer #1

Calculation of current value of one share is shown below

Working is given below

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